
Q sort

A method for analyzing the opinions of a group based on a
series of rankings (sorts) produced by the individual group members. The Q
sort was originally developed within the field of psychology as a means for
measuring correlations among the
views expressed by different people. The letter Q was assigned to
differentiate the method from another approach used in psychology, known as
the R method, for analyzing correlations among various factors (e.g.,
height versus age). The Q sort, in contrast, is based on looking for
correlations in the views of different subjects. A version of the Q sort is
a popular collaborative approach for prioritizing projects.
The process for ranking projects via a Q sort involves a
series of "rounds," with each round consisting of individual assessments
followed by a group discussion. To prepare for a Q sort, a short
description of each candidate project is written on a card. The resulting
card deck is reproduced, and the copies are distributed to group members. A
discussion is then held to improve the group's collective understanding of
the projects.
Next, each member of the group individually ranks the
projects by ordering his or her cards. Oftentimes, the ranking is done in
steps. For example, initially, projects may be divided into two categories:
higher priority and lower priority. Then the categories are decomposed to
provide more discrimination, for example, sub dividing projects in each
category into highest priority, medium priority, and lowest priority. The
process continues until each individual has a complete, ordered ranking
involving every project. A facilitator then tabulates the results and
displays them to the group as a chart graph. Following the Delphi method for group assessments, results
are reported anonymously, without associating people's names with their
rankings. A period for discussion and debate follows, with participants
arguing for various ranking positions for various projects. The process is
then repeated in a second round, again with discussion following the
anonymous reporting of individual priorities. By the third round, the
facilitator usually attempts to lead the group to a consensus ranking of
the projects.
The Q sort is popular, no doubt, because it is simple,
easy to understand, and allows all participants equal influence in the
decisionmaking process. Experience shows that it is a highly effective and
efficient way of promoting consensus among participants. Its limitations
are those associated with all methods that do not prioritize projects based
on explicit criteria, analysis, and benefitversuscost logic. The process
is not very transparent and does not generate documentation useful for
explaining the reasoning underlying priorities—to outsiders, it may
appear entirely political. Also, the Q sort depends on the participants
having a complete and impartial understanding of each and every project,
the needs the project serves, and the project's effectiveness. If there are
a great many projects or if participants do not have an equally good
understanding of all issues important to every project, basing priorities
on the popular vote that underlies the Q sort is not likely to produce an
optimal project portfolio.


quadratic programming

Similar to linear
programming, except that the goal of the optimization is to maximize or minimize a
quadratic function of the decision
variables, for example:
ax_{1}^{2} +
bx_{2}^{2} +
cx_{1}x_{2} ...
As with a linear program, there can be one or more linear
constraints, for example,
Ax_{1} + Bx_{2} ≤
N
There are many practical applications of quadratic
programming. For example, modern portfolio
theory identifies optimal investment portfolios by minimizing a
quadratic function representing portfolio risk (the sum of the variances
and covariances of the individual investments) subject to a linear
constraint (a minimum expected return from the portfolio).


qualitative risk
analysis

An analysis that produces an assessment and
characterization of risk in qualitative
terms, such as providing a word description of the magnitude and potential
consequences of the risk. Qualitative risk assessment may use numerical
rating scales to produce a relative risk
ranking. Popular qualitative risk assessment methods include scenario analysis, checklists, and a risk matrix. The advantage of qualitative
risk assessment is that it relatively quick, easy, and inexpensive.
Qualitative risk assessment is often used for the purpose of identifying
larger risks that should be subjected to quantitative risk assessment. .


quantitative risk analysis
(QRA)

An analysis that assesses and characterizes risk
quantitatively in terms of the frequency or likelihood and magnitude of
potential consequences. QRA involves creating a mathematical model of a
project or process that explicitly includes uncertain variable that cannot
be entirely controlled, and also decision variables that can be controlled.
.The mathematical model can be simple or complex. The uncertainty over the
model's uncertain variables is quantified either by using empirical data or
by quantifying the judgments of knowledgeable experts. The analysis
calculates the impact of the uncertain parameters and the decisions we make
on outcomes that we care about  such as profit and loss, investment
returns, environmental consequences, and the like. QRA is required by
regulations for certain projects and industries. Banks in particular are
required by their regulators to identify and quantify their risks, often
computing measures such as Value at Risk (VaR), and ensure that they have
adequate capital to maintain solvency should the worst (or nearworst)
outcomes occur.
